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Ways Of Changing Your Chapter 13 Bankruptcy Repayment Plan

25 October 2021 by Louise Boyd

It's crucial to get your repayment plan right when you file a Chapter 13 bankruptcy. The plan shouldn't only address how you are going to pay back your creditors, but it should also be something you can commit to. 

Since things don't always go as planned, circumstances may force you to seek modifications and amendments of repayment plans. You should consult a Chapter 13 bankruptcy attorney to determine which options will work for you in such cases. Here are some ways you can change your bankruptcy repayment plan.

A Plan Moratorium

With a plan moratorium, you get a break from making payments to the Chapter 13 trustee. Under Chapter 13 bankruptcy law, you qualify for a plan moratorium if you are:

• Facing a short-term loss of employment
• Facing a temporary disability or injury
• Facing an unanticipated and significant expense that prevents you from making plan payments.

A moratorium allows you a temporary break until you recover from your short-term financial issue. After the moratorium ends, you resume making payments from where you left off.  For example, if you were left with 12 monthly payments when the moratorium began, that's what you will start paying off when your moratorium ends.

Modifying Your Bankruptcy Plan

You can modify your bankruptcy plan before or after the confirmation of your repayment plan. If your situation changes before the court approves your repayment plan, you can file an amended plan for your creditors and the trustee to consider. Your Chapter 13 bankruptcy lawyer will assist you to create a feasible plan for both you and your creditors.

If the court has already confirmed your plan, you should file a motion to modify the payments to an affordable amount. You will have to explain the reasons why you need to amend the payment plans. You also need to prove how your circumstances have changed. A Chapter 13 bankruptcy attorney will help you gather the appropriate documentation to prove your case.

Hardship Discharge

This is a discharge granted by the court before you make all the payments listed in your repayment plan. You will get a hardship discharge if:

• You are unable to make payments because of issues that you cannot control
• Your unsecured creditors have received all they would have gotten under a Chapter 7 bankruptcy
• Modifying your repayment plan doesn't apply to your situation

Your Chapter 13 bankruptcy attorney will help you file a motion showing that a permanent condition prevents you from completing the payments. For example, you can prove that you were afflicted with a life-changing illness after filing a Chapter 13 bankruptcy.

If you have more questions regarding chapter 13 bankruptcy, contact a local professional.

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